Services Marketing Chapter 3 Plugging Into the Information Age

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Chapter 3
Plugging into the
Information Age

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Objectives
1. To explore the services economy and the
information age
2. To show how services marketers can use
information technology as an employee tool for
improving customer service and increasing
productivity
3. To demonstrate how services marketers can enlist
information technology to empower their customers
4. To explain how information technology can help
bridge the physical distance between organization
and customer and enable the interactive
experience

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Objectives (cont’d)
5. To illustrate the various ways in which services
marketers can employ information technology
to learn more about their customers and
respond to them more effectively
6. To caution service organizations regarding the
negative impact of technology
7. To convey the many challenges of using
technology to manage customer interfaces in
service industries

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Services and the
Information Age

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Services and the
Information Age (cont’d)
• Technology in the Core Service
• Technology as a Supplementary Service
Support Tool

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Enabling the Interactive
Experience

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Empowering Employees
Through Technology
• Technology Devices
• Networking

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Empowering the Customer
• Self-service machines, such as vending or
automated teller machines (ATMs)
• Computerized service delivery systems
• Intelligent agents
• Service robots

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Curating Customer Information
• Advances in information technology have
allowed organizations to collect large
quantities of information about customers
and to create and deliver customer services
hitherto unimaginable.
• It has also become possible to move from
mass marketing to targeting individuals.

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Curating Customer
Information (cont’d)
• Customer databases require several steps:
– Group customers into categories: current
customers, prospective customers, and lapsed
customers
– Data on the recency and frequency of each
customer's purchases
– Data on each customer's purchases over a period
of about twelve months
– Data on relevant customer information that will
improve the company's ability to serve customer
needs (preferred sizes, birthdays, credit card
numbers, etc.)

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Curating Customer
Information (cont’d)
• Uses
– Tracking customers' purchase patterns
– Make purchase patterns easily accessible to the
frontline service provider
• Cautions
– Services marketers need to be very cautious about
privacy issues as they create and use customer
databases

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Coping with Negative Impacts
of Services Technology
• Technology will continue to play a critical role
in service organizations’ competitive position.
• Service organizations often find that they have
implemented new technology systems only to
discover they have made no provisions for the
absence of the technology during a power
failure.
• Services employment levels may fall in
absolute terms as technology replaces workers
or reduces the need for workers.

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Challenges of Using Technology
to Manage Customer Interfaces
• Weak links in technological customer interfaces
• Steps for improving the technology of customer
interfaces

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Weak Links in Customer
Interfaces
• Automated Idiocy
– The rush to automate service functions often leads
to systems that automatically do stupid things.
• Time Sink
– New services technology can steal valuable time
from the technology user.
• Law of the Hammer
– Based on the idea that a small child with a hammer
sees everything as a nail. Technology can be used
too much!
– An obsession with too many “bells and whistles”

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Weak Links in
Customer Interfaces (cont’d)
• Technology Lock
– Technological designs persist long after their
functional value is gone.
• Last Inch
– Many customer interface problems occur at the point
of contact between the customer and the technology.
• Hi-Tech Versus Hi-Touch
– Customers face a confusing set of automated
instructions when they really need to speak to a
human being and not to a machine. Phone mail can
become “phone jail.”

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Steps for Improving the
Technology of Customer Interfaces
• Provide marketer input into the technology of
customer interface design
– The marketer can help prevent design problems
• Stay customer-focused, not machine-focused
– Essential to successful customer interface design
• Make services technology invisible to the
customer
– Place technology in the background
• Insist on flexible design
– Insist on designs that offer employees and customers
maximum flexibility